On November 22, Binance officially announced that it had reached a settlement with U.S. law enforcement agencies and would accept a total of $4.368 billion from U.S. law enforcement agencies such as the U.S. Department of Justice, the Commodity Futures Trading Commission, the Office of Foreign Assets Control, and the Financial Crimes Enforcement Network. fine.
According to court records, Binance faces three criminal charges, including conducting an unlicensed money transfer business, conspiracy charges, and violating the International Emergency Economic Powers Act. Binance’s violations include failing to block and report suspicious transactions related to terrorist groups, including Hamas al-Qasam Brigades, Palestinian Islamic Jihad, Al Qaeda, and the Islamic State.
Such heavy penalties are extremely rare in the entire global Internet era. A relevant announcement from the U.S. Department of the Treasury stated that the historic settlement of $3.4 billion by the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) is the largest fine in the history of the U.S. Department of the Treasury and FinCEN. At the same time, the CFTC’s $1.35 billion fine is also the largest fine in the history of the regulatory agency.
The reaching of this settlement will also mark the official end of the U.S. Department of Justice’s years-long accusation against Binance. U.S. Treasury Secretary Janet Yellen said that this settlement is a milestone for the virtual currency industry. If any institution wants to withdraw from the U.S. financial system, To benefit, we must abide by the rules that protect us from terrorists and foreign hostile forces.
Binance also issued a statement today saying, “Today we are pleased to inform that we have reached out to the U.S. Department of Justice, the Commodity Futures Trading Commission, the Office of Foreign Assets Control, and the Financial Crimes Enforcement Network regarding their historical registration, compliance, and sanctions issues. The investigation resulted in resolutions. These settlements acknowledged our company's responsibility for historical criminal compliance violations and allowed our company to begin a challenging yet transformational new chapter of learning and growth. As we continue to advance in compliance and governance enhancements are solidified in our commitment, we can begin to share Binance’s exciting vision for the future and the future of the crypto industry. We are confident that Binance will emerge as a stronger company for the next 50 years year to lay the foundation.”
Binance also emphasized, “We always adhere to the core values of user safety and security. We take our responsibilities as a custodian very seriously and provide 1:1 support for each user’s assets. This means that users can always Withdrawal of 100% of their assets from the platform. Notably, in our resolution with the U.S. agency, they: did not accuse Binance of misappropriating any user funds, and did not accuse Binance of engaging in any market manipulation.”
CZ leaves: Published internal letter, saying it was the best choice
As this years-long tug-of-war comes to an end, the Changpeng Zhao (CZ) era of Binance also comes to an end.
Binance founder CZ announced his resignation as CEO. It is reported that he is now prohibited from holding executive positions in Binance, but will also be allowed to retain his majority stake in Binance. CZ wrote on social media platform Richard Teng will take over as CEO of Binance.
According to GeekWire, CZ appeared in a Seattle court on Tuesday local time and filed a plea. Prosecutors accused Binance of facilitating transactions for sanctioned organizations and encouraging U.S. users to hide their locations to avoid money laundering charges. According to court records, CZ agreed to pay a $50 million criminal fine and entered into a plea agreement. CZ's personal bail was set at $175 million, one of the largest bails in history.
CZ appears in Seattle court photos
The court ruled that CZ will be allowed to reside in the UAE while awaiting judgment. CZ must return to the United States 14 days before sentencing.
CZ faces a maximum of 10 years in prison, but according to the plea agreement, the sentence is expected to be no more than 18 months. The U.S. Department of Justice has not yet made a final decision on the length of his imprisonment. The defense lawyer stated in court that sentencing will be postponed for 6 months. His personal sentencing hearing will be held at 9:00 on February 23, 2024, Pacific time (1:00 on February 24, Beijing time). His plea agreement has not yet been made public, and the U.S. Department of Justice has not yet decided how long they will seek to sentence CZ. of imprisonment.
Outside the court, CZ issued an open letter stating:
CZ’s open letter published on X
Today, I resigned as CEO of Binance. Granted, letting go emotionally isn’t easy. But I know it's the right thing to do. I made a mistake and I must take responsibility. This is what’s best for our community, for Binance, and for myself. Binance is no longer a baby, it’s time for it to walk and run on its own. I know Binance will continue to grow and excel based on its deep foundation.
I’m excited to announce that our current head of global regional markets, Richard Teng, has been appointed as Binance’s new CEO today. Richard is a highly qualified leader with over three decades of financial services and regulatory experience who will guide the company into its next phase of growth. He will ensure Binance delivers on our promises in the next phase of security, transparency, compliance, and growth. Prior to joining Binance, Richard was CEO of the Financial Services Regulatory Authority of Abu Dhabi Global Market (ADGM); Chief Regulatory Officer of the Singapore Exchange (SGX); and Head of Corporate Finance at the Monetary Authority of Singapore. With Richard and the entire team, I believe better days are ahead for Binance and the crypto industry.
What will I do next? I'll take a break first. I haven’t had a true (phone off) day off in the past six and a half years. After that, my current thinking is that I might do some passive investing and become a minority token holder/shareholder in startups in the blockchain/Web3/DeFi, AI, and biotech space. I'm excited to finally have more time to focus on DeFi.
Binance’s newly appointed CEO and CZ’s successor Richard Teng also issued an open letter stating:
Richard Teng’s open letter published on X
We operate the world's largest cryptocurrency exchange by trading volume. The trust our 150 million users and thousands of employees have placed in us is a responsibility I take seriously and value. With the support of CZ and our leadership team, I accept this role so that we can continue to meet and exceed the needs of our stakeholders. expectations, while delivering on our core mission of monetary freedom. The foundation that Binance rests on today is stronger than ever.
My focus will be:
Assure users that they can continue to have confidence in the financial strength, safety and security of the company;
Work with regulators to uphold high standards globally that promote innovation while providing important consumer protections;
Work with partners to drive the growth and adoption of Web3.
As the CZ era comes to an end, Coinbase CEO Brian Armstrong said on Tuesday that the resignation of Binance CEO Changpeng Zhao is an opportunity for the industry to open a new chapter. He expressed his belief that the United States will soon introduce regulatory regulations.
Shenyu posted on the X platform that the regulatory settlement agreement reached between the U.S. Department of Justice and Binance has cleared the way for ETFs. Thank you CZ for your outstanding contributions to the industry. We are willing to work with CZ to deeply explore the infinite possibilities of DeFi.
Shenyu posted a message on the X platform to thank CZ for its contribution to the encryption industry.
Justin Sun forwarded CZ’s resignation statement on the Founded Binance and pushed the entire industry to unprecedented heights. Without you, the cryptocurrency industry would not be able to reach the heights it is today. It makes me a little sad to think about you leaving this position, but when I think about the more time you will have I'm truly happy for you as you rest and enjoy your life. Thank you for everything you do for the industry."
Sun Yuchen expressed his gratitude to CZ on the X platform
But no matter what, CZ’s name will be remembered in the history of Chinese entrepreneurship. In 6 years, he created a huge business empire, including the largest crypto exchange in spot, futures, OTC, wild pool, cloud services, public chain, investment and other contents, serving more than 120 million users around the world.
In the end, CZ pleaded guilty and Binance settled, which was considered by insiders to have laid a solid foundation for the compliance path of latecomers.
In the hands of Richard, the future of Binance will be the main examination question in the next six years.
It’s worth paying attention to the market impact
As the dust settles on the settlement, Binance co-founder He Yi said that U.S. regulators have not accused Binance of misappropriating user funds or engaging in market manipulation. Binance is committed to further strengthening compliance measures and continuing to build and develop its platform.
Regarding the mistakes made by Binance in the past, He Yi believes, "Our early compliance was not good enough, and we had to be beaten if we made mistakes. Binance did not touch users' money, nor did it manipulate the market. If it does good compliance, it is still a good boy; this is not Regarding Binance, there was BitMEX before, and now it’s Binance. Let’s sit down and come one by one. Now it’s compliant Binance, and a new chapter has opened.”
Regarding the sky-high fine of $4.3 billion, Coinbase director Conor Grogan said that according to Binance’s Proof of Reserve (PoR) data, its crypto asset holdings include $6.35 billion in total assets and $3.19 billion in stablecoins, excluding off-chain cash. Amount or wallet assets not in PoR. Binance suspiciously paid the fine without selling the crypto assets.
However, the market feedback is still not very optimistic. BNBBNB fell by more than 10% in a short period of time, from the highest point of around US$273 to around US$227. According to Coinmarketcap data, as of press time, BNB was temporarily trading at $236.48, a 24-hour drop of 8.85%.
It is worth mentioning that the lawsuit between Binance and the SEC has not yet come to an end. He Yi said that because it is a civil lawsuit, it will be fought slowly, just like Ripple. Regarding whether the tokens sold are securities, the final result of this matter will be a long wait.
